Judge to Steelers: Prove new Heinz Field seats meet capital-improvement standard in lease

June 20, 2013 2:19 AM

Associated Press

The Steelers are looking to get the Pittsburgh-Allegheny County Sports & Exhibition Authority to pay the bulk of the cost to install 3,000 more seats at Heinz Field.

By Mark Belko Pittsburgh Post-Gazette

Much like a blitzing linebacker, an Allegheny County judge has sacked a bid by the Steelers for a quick end to a dispute over the financing for a proposed 3,000-seat expansion at Heinz Field.

And he may have exposed a weakness in the football team's legal front in the process.

In a ruling Wednesday, Common Pleas Judge Joseph James said the Steelers failed to show that the proposed south end zone expansion met the requirements to be classified as a capital improvement under the team's Heinz Field lease.

The decision amounts to a victory for the Pittsburgh-Allegheny County Sports & Exhibition Authority, the stadium's owner. The authority had argued that the team first must show the project meets the criteria for a capital improvement before the SEA is obligated to fund two-thirds of the cost, as the Steelers are insisting.

Under that criteria, the team must show: that a similar addition or modification has been installed in at least half of all National Football League stadiums with at least 25 percent of the cost covered by federal, state, or local governments; that the change is "reasonably necessary" to maintain the team's relative economic position in the NFL with regard to stadium revenue and expenses; and that it is "reasonably necessary" to prevent Heinz Field facilities and amenities from becoming "materially outdated" compared with other stadiums built between 1999 and 2004.

In arguments before Judge James last week, the Steelers maintained that another clause in the lease required the SEA to cover two-thirds of the $30 million cost of a "designated expansion" of no more than 10,000 seats.

The team's attorney, Arthur H. Stroyd Jr., contended that such an expansion is automatically deemed to be a capital improvement under the lease, a position Judge James rejected in Wednesday's ruling.

The judge noted the section of the lease that the Steelers are relying on uses the terms "capital improvement" and "capital improvements" in describing expansions to increase attendance, adding that the definition of capital improvements requires that the three criteria be met.

"The pleadings do not establish that the three requirements ... have been met," he wrote in denying the team's motion for partial judgment.

While the dispute over the lease language likely will end up going to trial, Wednesday's ruling could be problematic for the Steelers in trying to force the SEA to fund the bulk of the construction because it clearly implies they must first establish the expansion meets the standards for a capital improvement.

So far, they have not produced evidence to show that it does.

In a statement released after the ruling, the Steelers vowed to fight on.

"We remain confident in our legal and factual position. Our lease clearly sets out the obligations the SEA agreed to perform regarding our proposed improvements at Heinz Field," said Mark Hart, director of strategic planning and development for the team.

"We are simply asking that the SEA live up to its contractual obligations, as agreed to over a decade ago, just as we have lived up to our obligations during the past 12 years. Further delays by the SEA in honoring its legal obligations will put the expansion and improvements at Heinz Field in jeopardy."

Mr. Stroyd declined comment, saying he had yet to read the ruling.

In her own statement, SEA executive director Mary Conturo described the ruling as a "clear affirmation of our position on the Steelers' motion.

"As we have maintained, the Steelers are not entitled to receive funding for a seating expansion simply by unilaterally notifying the SEA of their wishes. They are required to satisfy the terms of the lease," she said.

The Steelers ended up in court over the dispute after a deal to finance the addition fell apart.

The proposed agreement would have funded the extra seats through a $1 increase in an existing surcharge on Steelers tickets and a new parking surcharge of $2 to $3 at lots around Heinz Field during home games, a formula the SEA thought was unworkable.

Team officials originally had hoped to have the new seats ready for this season. Mr. Hart has said that if there is no resolution to the squabble by early September, the team won't be able to complete the expansion for the 2014 season.

As part of the dispute, the Steelers are demanding to be reimbursed $5 million for installing a new control room at Heinz Field.

They also want the SEA to pay the full $3.65 million cost for adding a scoreboard to the stadium's north end. A non-jury trial is scheduled Dec. 4 on those issues.